Why Malta?

FXDD Malta offers many advantages including:

Higher leverage options
Opportunity to employ “hedging” strategies in MT4
Ability to choose ticket based trading (no FIFO)
Segregated accounts – offering added safety of funds
Funds can remain with JP Morgan Chase NY

FXDD Malta is an affiliate company incorporated in Malta, a full member of the European Union, and operates under the same regulatory structures as all other financial services companies in the European Union.

GENERAL QUESTIONS AND ANSWERS:

Q: Why is my account being moved to FXDD Malta?

A. FXDD is moving its non-U.S. accounts to Malta in response to questions that have come up in the past regarding the protection of customer funds in the event of a default by FXDD and in response to questions regarding CFTC and NFA mandated changes in the ways that customers can trade with U.S. registered firms.

Q: What is the maximum leverage that FXDD Malta will provide?

A: Customarily 1:200. Higher leverage may be offered in select cases.

Q: Will FXDD Malta allow hedging?

A: Yes. You will have an opportunity to exercise a "hedging" strategy to the extent available within MetaTrader

Q: Will FXDD Malta operate based on the FIFO rule?

A: You will be able to close all open positions in any order without regard to FIFO.

Q: Will FXDD Malta offer the same spreads?

A: The spreads will be identical to what FXDD New York is offering.

Q: Are deposits and withdrawals going to be handled in Euros?

A: No, in USD.

Q: Who are FXDD Malta’s liquidity providers?

A: Liquidity provided exclusively by FXDD New York.

Q: What will be the official statement of record?

A: Your official statement of record for all trading accounts will be MetaTrader4 Platform.

Q: Should I download a new version of MetaTrader in order to generate reports?

A: Yes, if you would like to generate printable MetaTrader statements. Download the new enhanced MetaTrader4 Platform here: http://global.fxdd.com/software/mt4setup.exe

Q: Where will my funds be held?

A: The majority of your funds will be held in a segregated customer account at JP Morgan Chase bank in New York.

Q: Will I be able to use my EAs if I trade through Malta?

A: YES

Q: What else can you tell me about why you chose Malta.

A: Since joining the European Union in 2004, the government of Malta has actively promoted the Republic’s development as a prime international business and financial center. All Financial Services businesses have been regulated by the Malta Financial Services Authority (MFSA)(www.mfsa.com.mt) since 2004, and subsequently under the Markets in Financial Instruments Directive (MiFID). The combination of these regulatory structures has created a harmonized regulatory regime for investment services throughout the European Economic Area in which Malta is included.. Malta also has double taxation agreements with 46 countries worldwide and another 15 are pending. As a member of the EU, Malta also cooperates with international organizations such as the Organization for Economic Co-operation and Development (OECD). As a result, Malta enjoys an excellent reputation and track record as a forward looking international business jurisdiction. Malta was recognized in the third edition of the Global Financial Centers Index (GFCI) report published in March 2008 by the City of London Corporation as one of the top three financial centers worldwide likely to increase in importance over the next two to three years. FXDD intends to be a part of that growth.

In addition to its excellent regulatory structure, Malta also offers a unique combination of Mediterranean Europe’s life and culture. Coupled with is cosmopolitan attitude toward global business, good location and temperate climate, Malta’s consistent constitutional based legal system, world class banking structure, leading edge technology infrastructure and highly educated multi lingual citizenry have made it a prime jurisdiction for many international companies. The vast majority of Malta’s citizens are at home in English and Maltese, and Italian, French and German are widely spoken. Malta was fortunate to have fared well in the recent economic downturn and enjoys a high credit rating among global credit rating agency agencies. Financial World Online noted that:

“Malta has weathered the global market turmoil and economic downturn better than most... In the World Economic Forum Competitiveness Index for 2008-09, Malta was judged to have the 10th soundest banking system among 134 countries, and came 18th for financial market sophistication.”

In 2009, Standard and Poor's maintained its stable outlook for Malta reaffirming its A/A1 credit rating, Fitch reaffirmed it’s A.

Q: Is FXDD Malta regulated?
Q: Who is the regulator of FXDD Malta?

A: FXDD Malta is licensed to act as an investment services firm by the Malta Financial Services Authority (MFSA). The MFSA is the equivalent of the SEC and the CFTC in the United States of the FSA in England. Malta is part of the European Union and as a member country it has transposed European Union legislation including related financial services directives. The MFSA has been appointed through Maltese legislation to regulate financial services in Malta with the ultimate aim of protecting investors and depositors. The MFSA is a very strict regulatory agency and its guidelines for operation are equal to those in other jurisdictions.

The licence of FXDD Malta is available for viewing from the MFSA website here. FXDD Malta's registration number is C48817.

Q. What is Markets in Financial Instrument Directive (also known as MIFID)?
Q. Is Malta subject to the EU Markets in Financial Instrument Directive (also known as MIFID)?

A: The Markets in Financial Instrument Directive (also known as MIFID), came into effect on 1 November 2007 and replaced the existing EU Investment Services Directive (ISD). MIFID provides a harmonised regulatory regime for investment services across the 30 member states of the EEA area. The main objectives of this Directive are to increase competition and consumer protection in investment services. Malta as a member of the European Union has implemented the MIFID through its Investment Services Act and applicable rules and regulations. As a licensed entity in terms of the Investment Services Act, FXDD Malta operates in compliance with the MIFID rules.

Q. What do you mean by funds being segregated?
Q. What do you mean by the fact that my funds/my monies are protected?
Q. Are my funds segregated from FXDD Malta/company's own funds?

A: As a licensed entity, FXDD Malta is required to abide by legislation and Malta Financial Services Authority (MFSA) rules which regulate investment services business.

The Investment Services (Control of Assets) Regulations has been implemented in Maltese legislation to provide protection to customers' funds when these are being held by a licence holder (such as FXDD Malta) in the course of rendering an investment service. In achieving such scope, the above legislation lays out the manner customers' assets (including monies) should be maintained and segregated (i.e. the customers' funds should be distinctive from other customers' funds and segregated from the Company /licence holder's own funds). Also, in case of insolvency, the creditors of the licence holder do not have right to claim on or against the clients' funds. The above legislation can be viewed from www.mfsa.com.mt : Section: Securities/Investment Services/Legislation.

Reference should also be made to Page 9 of 31 of the FXDD Customer Agreement 3.1.10.

Q. What is the investor compensation scheme?
Q. What compensation is enjoyed by investors/depositors in case of insolvency by a licensed entity?

The Investor Compensation Scheme is a rescue fund for customers of failed/insolvent investment firms which are licensed by the Malta Financial Services Authority. This scheme is managed by a management committee which has been appointed by the MFSA. As a licensed entity, FXDD Malta contributes to the Investor Compensation Scheme.

Most investors and types of investment are covered under this scheme. Investors that do not fall under the definition of professional clients and eligible counterparties (such as other investment firms, credit institutions, insurance companies etc) are eligible to claim under the Scheme. Also no claims may be made on the basis of the following:

(i) Market movements resulting in a decrease in the value of an investment;
(ii) Poor investment advice;
(iii) A failed investment that had been duly executed;
(iv) Inflation;
(v) A decrease in interest rates; and
(vi) Communication interruptions or malfunctions.

As legislation stands today, the Scheme can pay out an investor the lesser of 90% in respect of all claims which have been made by such investor or up to €20,000 (which is approximately USD 25,000). All computations for claim are made in the currency of the investment and payments of compensation are made in the same currency as the investment.

The above is for information purposes only. For further information regarding the Investor Compensation Scheme, we highly recommend that the www.compensationscheme.org.mt is consulted.

Reference should also be made to Page 8 of 31 of the FXDD Customer Agreement 3.1.10.

Q. What are the protections of a client that falls under a Retail Category?
Q: What rights would I lose if I want to be reclassified as Professional Client instead of Retail Client?
Q: What does the term 'Retail Clients afford the most regulatory protection mean'?

In essence, the term 'most regulatory protections' refers to the Investor Compensation Scheme rights which are only applicable to Retail Clients. In this regard, a client that falls under Retail Category but opts to be re-classified as Professional Client would be losing the above right. For further details kindly refer to the FXDD Malta Client Categorisation Paper on FXDD Malta website and to Section 7.3 on Page 9 of the FXDD Customer Agreement.